THE HINDUSTAN CO-OP. BANK LTD., MUMBAI V. JT. CIT 13(3), MUMBAI

ITA 2742/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0934 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Depreciation; Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2742/MUM/2016 ASSESSMENT YEAR: 2010 - 11 THE HINDUSTAN CO - O PERATIVE BANK LTD. 4 - A, DEVI GALLI, BABURAO BOBDE MARG, LOKHAND BAZAR, MUMBAI - 400009 VS. ACIT - 13(3), AAYAKAR BHAVAN, MUMBAI. PAN NO. AABAT4355R APPELLANT RESPONDENT ASSESSEE BY : MR. RAVI SAWANA , AR REVENUE BY : MR. D.G. PANSARI , DR DATE OF HEARING : 15/03/20 1 9 DATE OF PRONOUNCEMENT : 25/03/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2010 - 1 1 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) - 28 MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE LEVIED PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T ACT THE HINDUSTAN CO - OPERATIVE ITA NO. 2742/MUM/2016 2 BECAUSE OF ADDITION OF RS.7,23,140/ - DUE TO COLLECTION COLLECTED AND CREDITED TO BUILDING FUND. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 27L(L)(C) OF THE I.T ACT BECAUSE OF DISALLOWANCE OF RS.5,00,647/ - DUE TO EXCESS DEPRECIATION PERTAINING TO AY 2010 - 11. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T ACT BECAUSE OF ADDITION OF RS.97,129/ - BEING SHORTFALL IN THE COMMISSION INCOME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT EVEN WHEN THE PENALTY WAS INITIATED IN THE ASSESSMENT ORDER FOR FURNISHING INACCURATE PARTICULARS' AND LEVIED IN THE PENALTY ORDER FOR 'WILFUL CONCEALMENT. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT EVEN WHEN THE PENALTY NOTICE UNDER SECTION 274 OF THE IT ACT, DID NOT STRIKE OUT THE INAPPLICABLE LIMB OF SE CTION 271(1)(C). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2010 - 11 DECLARING TOTAL INCOME OF RS.5,60,36,119/ - . THE ASSESSING OFFICER (AO) COMPLETED ASSESSMENT U/S 143(3) DATED 26 .03.2013 ON A TOTAL INCOME OF RS.6,44,62,080/ - . THE ISSUE IN DISPUTE IN THE INSTANT CASE IS THE PENALTY LEVIED BY THE AO , SUBSEQUENTLY CONFIRMED BY THE LD. CIT(A) ON THE FOLLOWING ADDITIONS /DISALLOWANCES: (I) COLLECTION COLLECTED AND CREDITED TO BUILDING FUND OF RS.7,23,140/ - , (II) DISALLOWANCE OF EXCESS DEPRECIATION OF RS.5,00,647/ - AND THE HINDUSTAN CO - OPERATIVE ITA NO. 2742/MUM/2016 3 (III) COMMISSION INCOME ACCOUNTED SHORT OF RS.97,129/ - . 4. THE LD. COUNSEL OF THE ASSESSEE BEGINS WITH THE 3 RD GROUND OF APPEAL. IT IS STATED BY HIM THAT IN THE NOTICE U/S 274 R.W.S. 271 OF THE ACT FOR THE IMPUGNED ASSESSMENT YEAR, THE INAPPROPRIATE WORDS AND PARAGRAPHS HAVE NOT BEEN DELETED AS IS EVIDENT FROM THE FACT THAT BOTH CONCEALED THE PARTICULARS OF YOUR INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME APPEAR TOGETHER. THE LD. COUNSEL RELIES ON THE DECISION IN CIT V. SAMSON PERINCHERY (2017) 88 TAXMANN.COM 413 (BOMBAY), CIT V. MANJUNATH COTTON & GINNING FACTORY (2013) 35 TAXMANN.COM 250 (KARNATAKA), MEHERJEE CASSINATH HOLDINGS (P.) LTD. V. ACIT [2017] 88 TAXMANN.COM 777 (MUMBAI - TRIB ) . FURTHER IT IS EXPLAINED BY HIM THAT I N THE ASSESSMENT ORDER, THE AO HAS INITIATED PENALTY ON THE GROUND THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS IN RESPECT OF THE ABOVE INCOME, WHEREAS I N THE P ENALTY ORDER THE AO LEVIED PENALTY ON CONCEALMENT OF INCOME . ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE INSTANT CASE, WE FIND THA T IN THE ASSESSMENT ORDER DATED 26.03.2013, THE AO HAS INITIATED THE PENALTY FOR FILING INACCURATE PARTICULARS OF THE INCOME (PARA 11 OF THE ORDER) , WHEREAS IN THE PENALTY ORDER DATED 30.09.2013 , HE CONCLUDED WITH LEVY OF PENALTY FOR CONCEALMENT OF INCOME. THE HINDUSTAN CO - OPERATIVE ITA NO. 2742/MUM/2016 4 IN CIT VS. SAMSON PERINCHERRY (ITA NO. 953, 1097, 1154 & 1226 OF 2014), THE HONBLE BOMBAY HIGH COURT HELD: THEREFORE, THE SATISFACTION OF THE ASSESSING OFFICER WITH REGARD TO ONLY ONE OF THE TWO BREACHES MENTIONED UNDER SECTION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WILL NOT WARRANT/PERMIT PENALTY BEING IMPOSED FOR THE O THER BREACH. THIS IS MORE SO, AS AN ASSESSEE WOULD RESPOND TO THE GROUND ON WHICH THE PENALTY HAS BEEN INITIATED/NOTICE ISSUED. IT MUST, THEREFORE, FOLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 5 .1 RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE BOMBAY HIGH COURT, WE DELETE THE PENALTY U/S 271(1)(C) CONFIRMED BY THE LD. CIT(A). 6 . IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/03/2019 SD/ - SD/ - ( PAWAN SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 25/03/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI